802.11 - Planet Philadelphia conference
6/12/2002 - Session #2- Track 1: Public Hotspots Evolving a Viable Business Model
Arturo Pereyra, Co-Founder WiFi Metro
WiFi Metro has 60 Hotspots - launched January of this year (?).
Hotspot market - 2,000 hotspots today. 25,000 hotspots by 2005.
By 2006, 25% oof business travelers will be WiFi enabled. I think that is a very low estimate.
Business Model - value created and owned along the business chain. Everyone says that.
Provide value to location partners, and roaming partners. Provide location based content to landlords. Of course you should do this, but is this part of the fundamental business model pillar?
Need to execute on a low cost model. Very True - there is not a lot of margin in the hotspot biz.
Will be in 8 Tier-1 Metro markets by the end of the year.
Daniel Lowden, VP Marketing, Wayport
Supports Roaming agreements - certainly a different perspective than T-Mobile.
Factoid - NASA is the current largest user of WiFi.
Markets:
- Corporate and Enterprises
- Education
- Home
- Free Networks (drives awareness of WiFi)
- Where the business traveler needs the connectivity - hotels and airports.
Business travelers are premium customers - hotels and airports are their habitats. They want high speed data - yes we do!
Multiple revenue opportunities:
- Hotel guestrooms.
- Hotel common areas.
- Hotel Meeting space.
- Airport - WiFi coverage at gates.
- Airport - Laptop lanes
Barriers to Entry:
- Complicate business - lots of companies in this sector have gone out of business.
- All about providing value to the property partner.
Providers must have:
- Must have a 24/7 call center.
- Must provide network monitoring across the entire network - take care of the customer. Monitor down to the hotel room level.
- Security and abuse management - implemented a fraud detection system.
- Roaming services. Talk to the T-Mobile representative.
400 hotels nationwide. 4 all wireless airports. Some number of airports with Laptop lanes.
Majority of hotel customers connect on the daily connect plan. Wayport also has prepaid cards and monthly membership programs.
Wayport is doing co-promotions with Microsoft, IBM, and Dell.
Wayport is up to 270,000 connections per quarter. Good volume.
Rick Ehrlinspiel, President Surf and Sip
Giving a history of the evolution of their business model. Definitely grassroots.d
Building networks is their model - don't want to sell memberships. They want to sell to Boingo, iPass, etc.
Other providers are also interested in Surf and Sip's back office - Network Monitoring etc.
People will pay for QoS and footprint.
Market surverys of providers - 2 common responses: 1) Everyone knows this is going to be a huge market. 2) But when is it going to happen?
Q & A
Factoid - I believe it was Surf and Sip - 85% of usage by an end customer is from one location.
Surf and Sip Comment: there's no such thing as owning the venue - another WiFi provider can setup across the street.
Business Evolution:
- WiFi Metro guy - Business has to be build through revenues. Capital is no longer cheap. WiFi is on track to be profitable in San Fran. by the end of the summer.
- Wayport - hotels cover capital expense. Business model has to make sense. Cost and revenue growth.
- Surf and Sip - different market these days. Have a revenue stream and watch expense.
- My comment: These are not strategic responses, these are day to day tactical survival responses. They're true, but they're not the evolutionary visision.
Top Three Challenges:
- Surf and Sip
- Understanding what your customer will pay for.
- Location acquistion.
- Roaming and security.
- Wayport
- Ensure scalable network.
- Support network end-to-end - monitoring, marketing, etc.
- Surf and Sip
- Make sure venue doesn't bring network down.
- Not sure what the other two issues were.
What's the advantage to a large carrier to acquiring one these companies
- Surf and Sip - they already have the service rolled out
- WiFi - venue access. Different and complex new business. Carriers are not used to technical customer support and billing. We are.
- Wayport - Quick low cost deployment of hotspots - much quicker and cheaper than carriers.
7:45:20 AM
|